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Stronger growth seen in Feb trade, industrial output [10-04-2012]  
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Trade and industrial production data on the tap in Malaysia today are expected to show stronger growth in February, say economists.

The improved "technical rebound" numbers could be due to the higher number of working days during the month, compared to the festive month of January.

Going forward, they expect a gradual improvement in export and industrial production performance.

A Business Times poll expects the Industrial Production Index (IPI) to grow by an average 6.06 per cent rate year-on-year.

The poll for the trade data showed exports are poised to grow by 12.1 per cent year-on-year, supported by imports (16.74 per cent) and trade balance (9.81 per cent).

The Statistics Department will release the IPI and manufacturing sales data today, while the International Trade and Industry Ministry has also brought forward its release due to the public holiday tomorrow.

DBS Bank economist Irvin Seah expects imports to surge and industrial production to record solid expansion from January.

"The significant improvement in February is mostly a technical rebound ... ," he said.

The Purchasing Managers Index for key export markets, such as Singapore, the US and China, have been heading northwards and suggesting continued expansion in the manufacturing output.

The key electronics industry, Seah added, is also turning around with the latest February 12 US Semi book-to-bill ratio recorded 1.01, the first above-parity reading in 17 months.

This suggests that the global electronics sector is expanding, he said.

CITI economist Kit Wei Zheng said the IPI is expected to accelerate, in line with trends seen in other Asian economies, which have also seen production patterns distorted by the Chinese New Year falling in January this year, instead of February last year.

There are also some bright spots in the data. The Malaysian Automotive Association posted positive growth of 4.7 per cent year-on-year in the number of passenger cars produced in February (January: -16.2 per cent).

In the case of exports, he said, palm oil exports are likely to slow sharply. The Palm Oil Registration and Licensing Authority's February data shows the growth of the combined value of palm oil and palm kernel oil exports plunging 8.0 per cent year-on-year.

During February, China's imports from Malaysia (in ringgit terms) surged 37.8 per cent year-on-year, along with Singapore (23.8 per cent).

But Gundy Cahyadi of OCBC Bank thinks data will stay soft in February.

"Export and IPI growth likely to stay sluggish on the back of the bleak import growth of intermediate goods in January," he said.

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